TV production company sues ITV over &#163;2m repeat fees

The television production company responsible for A Touch of Frost launched a multi-million pound lawsuit against the broadcaster ITV yesterday, claiming it was a victim of a sleight of hand over tariffs that was exploitative, anti-competitive and had cost it more than £2m in repeat fees.

Excelsior Productions said that by classifying repeats on the ITV2 and ITV3 channels as sales to outside networks, the broadcaster has paid less than £20,000 for hundreds of hours of A Touch of Frost, The Darling Buds of May and My Uncle Silas, rather than the £2m-plus that would have been due had the new stations been designated as part of the ITV network.

"ITV essentially launched two new channels on the strength of repeating programmes that other people couldn't afford to run, and that it can only afford because it is riding roughshod over the makers," Pip Burley, the chief executive of Excelsior, said. "It is an extremely exploitative position that ITV has adopted, and it gives them an extraordinary competitive advantage."

The writ is the latest development in more than eight years of arguments between the two companies, whose original rights agreements were signed before ITV2 and ITV3 came into existence. "We have consistently over this long period been suggesting re-negotiating or finding some kind of compromise, none of which have even been considered," Mr Burley said.

A spokesman for ITV said: "We are yet to receive service of any proceedings. This is a longstanding issue with Excelsior and we are confident of our position. Rights negotiations are increasingly complicated because linear broadcasting from a small number of channels has been replaced by a fragmented audience who may watch terrestrial TV, satellite or cable channels, or, increasingly, programmes made available over the internet or as video-on-demand. In these circumstances, the old rights agreements – covering, for example, UK distribution – no longer make any sense.

"A deal with a broadcaster used to, by definition, cover every possible UK use, but there are now so many different outlets and platforms that producers are interested in exploiting that the agreements are out of date."

Andrew Chown, the director of business affairs for the Producers Alliance for Cinema and Television, said: "New technologies have caused a fundamental re-assessment. It is a much more complex economy than it was before, and almost as soon as you have finished doing one deal you have to start doing the next because in the meantime some new platform has cropped up or a new market has opened up or two channels have merged."

The latest development to tax the production industry is the Kangaroo project, a joint initiative between the BBC, ITV and Channel 4 to make their content available on demand over the internet. Michael Grade, the executive chairman of ITV, has described the scheme as "an important shop window for UK content", but production companies face difficult rights negotiations over ownership, revenue sharing and what conditions are attached.